THE BLOG

We Need the Real Living Wage to Tackle the Low Pay Challenge

04/11/2015 16:36 GMT | Updated 04/11/2016 09:12 GMT

One of the great things about Living Wage Week is that it gives us an opportunity to celebrate the victories that have been achieved over the last year. The Camden school meals staff, the shop workers at Aldi and local authority employees up and down the country. All these workers are beneficiaries of a movement for decent pay, which combines brave union members, tireless community campaigners like Citizens UK, and enlightened employers and councillors who recognise the business case for higher pay interms of recruitment, retention and productivity of staff.

But Living Wage Week is also a time to take stock of the low pay challenge that confronts a growing number of working people in the UK - and think about what more can be done to tackle it. Despite the many living wage victories, the outlook is bleak. Recent research from the Resolution Foundation shows that last year more than one in five employees (22% or 5.7million individuals) were paid less than the living wage. This is an increase from 20 per cent in 2013. What's more, this number is set to grow further. The number paid below the living wage is projected to reach 24% (6.5million individuals) in 2016, and 30% by 2020, if the living wage continues to rise as it has done previously.

Against this backdrop, we should see George Osborne's 'national living wage' for what it is - an enhanced minimum wage. And while it would be churlish to deny that it will do some good (it was after all a policy that was swiped straight out of Labour's 2015 manifesto), we need to recognise three big flaws in the government's way of going about things that reveal the weakness of its approach to tackling lowpay.

First, for too many low paid households the government is attempting to give with one hand whilst trying to take more away with the other through cuts to tax credits. Despite claims to the contrary by the government, approximately half of those currently receiving tax credits won't be compensated by the Chancellor's 'national living wage'.

Second, the 'national living wage' is full of holes, through which too many on low pay will fall. No-one under 25 will receive it, regardless of their job, experience and their responsibilities. For those in the public services, such as low-paid local government staff and care workers, there is a fear that it won't be properly funded by central government. This will lead to more illegal non-payment or an increase in public authorities robbing Peter to pay Paul - by cutting other terms and conditions to make the hourly rate.

Third, there is an important difference between a minimum wage and a living wage, which the government use of language obscures. They do different things. The former provides a floor. The latter is based on an independent calculation of what is required to achieve a modest but socially acceptable standard of living. George Osborne can call his what he likes, but to those trying to live on it, the difference will be measured in skipped meals and cold homes.

So when Living Wage week isover, what should we do? For starters, campaigners need to continue to be advocates and agents for the real living wage - talking to employers to highlight the difference and making the business and the moral case for paying the higher rate.

Unions must keep up the pressure, organising in low-pay workplaces and communities to ensure that it's paid, just as Unison has done at NHS sites in Leeds and Bradford, and with partner unions at universities in Scotland, Bedfordshire and at UEA.

Enlightened employers, in both the public and the private sector, need to lead by example. But politicianshave a role in this too - to hold the government to account on the effectiveness of its approach to tackling low pay.

The new national living wage that they have put in place, while an improvement on the wage floor, is simply not enough to live on. The Conservatives claim to be the party of working people, but the facts tell us otherwise.

Angela Eagle is the shadow business secretary and Labour MP for Wallasey

Dave Prentis is general secretary of Unison